Motorking Corporation, a market leader in the production of specialized engine additives, is considering introducing a new "gas extender" product. This product is added to an automobile’s gasoline to extend mileage and reduce exhasut emissions. Motorking's manufacturing facility can produce 50,000 cases of the new product per year with a set-up cost of $100,000. The average variable cost per case would be $5. Large orders, (i.e., above 50,000 cases) will be subcontracted to a local refining company. Motorking has signed a secrecy agreement with the vendor that guards the basic process. The variable cost per case, if the new product is produced outside, is $9. Whether the product is manufactured by Motorking or by the vendor, there is a $12 per case cost for marketing and overhead. Motorking's production manager is considering three production levels for the new product: 50,000 cases, 75,000 cases, and 100,000 cases. The level of sales will depend on the state of the economy. Sales estimates prepared by the marketing manager indicate that if the economy is strong then Motorking will sell 100,000 cases, if the economy is moderate they will sell 70,000 cases, and if the economy is weak they will sell only 40,000 cases. The marketing department forecasts that there is a 45 percent chance of a strong market and a 20 percent of a weak market. A case of the new product is priced to sell at $39.95. Unsold units will be sold at a clearance sale with a 55 percent discount. Before deciding on a method and level of production, the production manager wishes to evaluate the possibility of hiring a local market research firm to conduct a survey. The manager has received a proposal from Decision Systems Inc. (DSI). DSI proposes to conduct the survey for $20,000. In the past, DSI has demonstrated the following performance: Correctly predicted a strong economy 10 out of 15 times (three times they predicted a moderate economy and two times a weak economy). Correctly predicted a moderate economy 7 out of 10 times (two times they predicted a strong economy and one time a weak economy). Correctly predicted a weak economy 5 out of 6 times (one time they predicted a moderate economy). The production manager wishes to know: 3) What is the probability that the economy will be weak given a forecast by DSI that the economy will be weak? What is the probability that DSI will predict a strong economy?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Motorking Corporation, a market leader in the production of specialized engine additives, is considering introducing a new "gas extender" product. This product is added to an automobile’s gasoline to extend mileage and reduce exhasut emissions. Motorking's manufacturing facility can produce 50,000 cases of the new product per year with a set-up cost of $100,000. The
Motorking's
A case of the new product is priced to sell at $39.95. Unsold units will be sold at a clearance sale with a 55 percent discount. Before deciding on a method and level of production, the production manager wishes to evaluate the possibility of hiring a local
Correctly predicted a strong economy 10 out of 15 times (three times they predicted a moderate economy and two times a weak economy). Correctly predicted a moderate economy 7 out of 10 times (two times they predicted a strong economy and one time a weak economy). Correctly predicted a weak economy 5 out of 6 times (one time they predicted a moderate economy). The production manager wishes to know:
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3) What is the probability that the economy will be weak given a
forecast by DSI that the economy will be weak? What is the probability that DSI will predict a strong economy?
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